PE ratio, stands for the stock price vs. earning per share ratio, is the most commonly used (and mis-used) ratio in the investing world. I saw this PE ratio question at trader168 couple days ago, the question goes like this:
BX P/E: 1.97
MSFT P/E: 21.15
JAVA P/E: 46.01
BIDU P/E: 195.95
VMW P/E: 268.98
为什么PE比能差这么远？不同行业之间的PE是不是没得比？
Why the big difference on PEs from difference companies? Is that true that we should not compare PEs from different industries? (my take: that’s true)
目前PE还算个有用的指标么？
Is PE a still usable indicator? (my take: yes. If used properly)